Business strategies are plans formulated by top management and strategic thinkers of organisations in order to accomplish set goals and targets at desirable time. Business strategies directly reflect on the actions which will be taken by organisations in future to secure competitive advantages (Hill, Jones and Schilling, 2014). In this context, the following report will focus on analysing the impact of business strategies formulated by telecommunication sector of UK by reviewing strategies of Vodafone. Vodafone is one of the leading telecommunication and mobile services provider headquartered in UK. The influence of external environment on its business strategies will be determined by using specific models. The internal environment and organisational capabilities will be assessed in this report. The competitor analysis of the organisation and understanding of strategic direction will be made in this assignment. Eventually, this assignment will aid in enhancing the knowledge and understanding regarding business strategies formulated by Vodafone.
P1 Analysing impact and influence of macro environment on Vodafone
Macro environment refers to the external environment which affects the growth and development of organisation externally. In order to assess the impact and influence of macron environment, strategic tools such as PESTLE and Ansoff growth vector matrix will be used.
(i) PESTLE model
- Political Factor: Political factors refer to the factors that influence organisational strategies due to interventions and transformations in policies and legislations. The main political factors affecting Vodafone include EU Roaming Regulation that aims to decrease charges for mobile phone usages abroad by 70% and increasing level of consumer rights within Europe, and decisions made by European Union Regulatory Framework for the communications sector (Moutinho and Vargas-Sanchez, 2018).
- Economic Factors: Economic Factors such as inflation rate, interest rate, growth rate, unemployment rate of the country that drastically influences the business strategies of the organisations. The current economic condition of United Kingdom got destabilised due to BREXIT which affects major sector including telecommunication sector (Steinbach, Devers and Cannella, 2017). Albeit Vodafone devised plans such as lowering cost of specific plan helps them to sustain in recessive economy of UK.
- Social Factors: Societal tastes and preferences are dynamic in nature. Social factors include customers’ needs and expectations. In global competitive environment, everything is easily accessible to customers which enhance their needs and expectations. In order to sustain in competitive environment it is essential and important for organisations to fulfil needs and expectations of customers (Wheelen, Hoffman and Bamford, 2017). Vodafone have immense and variety of options available for every segment of customers in UK and all over world.
- Technological Factors: Since industrial revolution, uses of technologies have been greatly increased in industries. Digital technologies have transformed the perception of organisation of 21st century (Meyer, Neck and Meeks, 2017). Vodafone in their premises used latest and up to date technologies in order to sustain in competitive advantages. The technologies are rare and hard to imitate.
- Legal Factors: Legal Factors involves legal laws and legislations which are formulated by Government of United Kingdom. In order to prevent legal uncertainties, Vodafone must follow certain laws and legislation formulated for telecommunication sector of United Kingdom (Bettis, et.al., 2016). These laws include Data Protection, Employment Rights, Consumer Health and Safety, Environment protection, etc.
- Environmental Factors: Environmental factors affect the business strategies of organisation greatly. As business are thriving in present era due to enhancement in technologies but it also negatively affects the surrounding environment. Glaciers are melting rapidly due to increase in global warming (Ethiraj, Gambardella and Helfat, 2016). Vodafone in their CSR initiative devised strategies and plans to protect the environment. Government also mandates organisation to follow policies to safeguard environment.